The engine and parts maker Cummins Inc. suffered a major blow during the past quarter with a 60 percent drop in sales for the Chrysler Dodge Ram pickup, a major customer.
Similarly, engine sales for recreational vehicles took another hit, a 40 percent decline.
And yet, the company managed to have its best quarter ever.
That's because Cummins has spent decades building a presence in what are now the world's fastest growing economies, including China and India.
International sales and exports have been one of the few bright spots in an otherwise gloomy economic picture.
Sales abroad have benefited from the weak dollar, which makes American goods cheaper overseas.
In Tennessee, exports were up 10 percent during the first half of the year, tracking an overall increase in exports from the U.S.
"The best markets now are overseas,'' said Eric Bond, a Vanderbilt University professor who specializes in international trade.
Cummins' engine filter plant is tucked away down a shaded street in Cookeville, where 750 people assemble the company's filters for diesel engine customers around the world.
About 35 percent of the plant's sales go abroad.
Customer service employees on the second floor of the building interact with customers in Spanish, French, Flemish, German and Moore, a West African language, as they look out on the foothills of the Cumberland Mountains.
An additional 130 people work for Cummins Filtration, a division based in Nashville, and about 225 people work for the company's business services in Nashville.
"A lot of people really want to work here,'' said Brad Long, the plant's director of aftermarket quality, noting the layoffs at other manufacturing plants in the area.
Tennessee's jobless rate reached a 21-year high in July at 6.9 percent, driven by layoffs in manufacturing and financial service industries.
Employees addedCummins had to add a third shift this year on one of its air filter lines to handle the increased demand.
A company spokesman said Cummins isn't shifting work overseas. In fact, Cummins has added 3,000 net new employees in the U.S. during the past five years, according to spokesman Mark Land.
"I've had customers from Alaska, the Middle East, Russia. They all want our product, anywhere that uses engines,'' Long said.
While U.S. banks and some manufacturers such as LP have cut or suspended dividends, Cummins boosted its dividend recently from 12.5 cents per share to 17.5 cents for shareholders as of Aug. 22.
The Columbus, Ind.-based company took home $3.4 billion in revenue during the second quarter and profits of $293 million, up 37 percent from the same period a year ago.
Cummins executives are not the only ones crowing about good fortunes lately.
Heavy equipment maker Caterpillar Inc. beat Wall Street expectations for the second quarter recently with a 34 percent increase in profits, to $1.1 billion. The company that sprouts out of the Midwestern cornfields of Peoria, Ill., has roughly 60 percent of its revenue coming from outside the U.S.
The finance arm of the company employs about 900 people on West End Avenue in Nashville, providing loans for the purchase of the company's engines, heavy machinery and other equipment around the world.
"It was a very, very good second quarter,'' Mike Dewalt, the company's director of investor relations, said on the recent conference call. "For many large machines and engines, we are selling as much as we can make."
China, India and Eastern Europe are huge growth areas for the company, as cranes dot the landscape and developing nations scramble to meet their infrastructure needs.
Cummins got way ahead of its competitors by going to China soon after President Nixon first shook hands with Mao Zedong in 1972, according to Wall Street Access analyst Charlie Rentschler. Cummins' chairman, J. Erwin Miller, flew over to China in the 1970s and sold some mining equipment to the government. Cummins has been there ever since.
The company is building two light duty truck plants in China and a third in Indiana.
Foreign business has been so good for American companies lately that financial advisers are targeting international markets as a turn-around strategy for slumping firms and small businesses are salivating for the opportunity.
Baking supplies shippedThe Tennessee Bun Co. based in Dickson, which bakes buns for McDonald's, started a bakery supply export business for Europe just three months ago, for example.
"We are able to buy supplies in the U.S. and ship them over there,'' said the company's founder and chief executive officer, Cordia Harrington. The sole reason, she admitted, was to take advantage of the weak dollar, which makes her supplies, such as oil, trays and pans, comparably cheaper than for European companies.
She got her first contract last month from an English company for $500,000. She's bidding for business in Germany, Ireland and Poland.
"(The currency difference) is going to go away, but we might as well take advantage,'' she said.
But looking just at manufacturing omits a major shift going on in the U.S. economy, as manufacturing plants shed jobs and the service sector picks up workers. Architects such as Gresham Smith & Partners and law firms such as Baker Donelson are opening offices in China.
"In the longer term, there's going to be more of a worldwide view of business activity," Vanderbilt's Bond said. "Global companies are going to be at an advantage. The countries that have done the best with it are taking advantage of our technological superiority."
Kevin Crumbo, a certified public accountant and head of the turnaround and restructuring group at Kraft CPAs, is advising businesses in trouble to look abroad for markets. Cutting costs is not the only option, he said.
"One of the fastest ways to get a company turned around is to find new markets for existing products,'' he said.
And for now, big American brands such as Gibson Guitar or Jack Daniel's still have clout around the world.
"The Brazilians are very fashion conscious,'' Crumbo said. "If you sell clothing for the country music industry, and you're struggling here in Nashville, you might find demand for your product in Brazil."
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